Aritcle Of Association| Lawyers

1. Concept Of Articles Of Association

Articles of association internal affairs or rules of a company. Articles of association of a company are terms of contract between the members and these terms are legally binding upon the members. Sec 2(1) (26, 28), 34 of company ordinance 1984. The articles of association are the regulations or by laws which governs the internal  organizations and conducts of company.

2. Procedure Of Aritcles Of Association

a.   Number of persons

b.   Share capital and its division

c.    Alteration an reduction of shares

d.   Borrowing power

e.   Appointment powers duties qualification of director and chief executive

f.      Declaration of dividend

g.    Procedure as to company meetings

h.   Meeting s notices voting power and procedures

i.      Common seal / stamp

j.      Winding up

Table A; company limited by shares

Table C; company limited buy guarantee

Table D; unlimited company. Company limited by shares the registration of articles is optional. Company limited by guarantee and unlimited company the registration of articles is compulsory.

3. Meetings Of Board

Binding on members in their relations to company binding between the members not binding in relation to outsides. Meeting of board of share holders. Consultation with members .Settlement with registrar . Notice of general meeting . Special resolution. Alteration filed to registrar. Information to stock exchange. If company is listed in stock exchange a copy of special resolution passed by share holders along with changed articles shall sent to stock exchange.

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Conversion Of Company| Law

1- Concept of conversion:

              Conversion of a public company into private company and private company into public is basically to change the liability of its members and their rights. Company ordinance provides the procedure for conversion along with its effects. Section 44 to 45 of Companies Ordinance 1984

               There are two kinds of company.

 “A company which is not a private company.Private company means a company which its articles. (i)- Restrict the right to transfer its shares (ii)- Limits the number of members up to 5  (iii)- Does not invite public to subscribe its share  (iv)- Prohibit issuance of debenture to public.

2- Conversion of company:

                 Company can be converted into each other by following procedure of company.   There are two modes of conversion.  (i)- By alteration in articles (ii)- By non-competition of articles. There are two types of conversion of company. (i)- Conversion of public into private (ii)- Conversion of private into public.  A notice for conversion of company shall be given to all the member of that company.

 a- Date of meeting  b- Purpose of meting c- Place of meeting  d- Copy of resolution. General meeting shall be held and members shall be discussed the notice. A special resolution by ¾ majority shall be passed to convert a private company into public company. After the special resolution is passed alteration shall be made in memorandum and article

              Following are the effects of conversion of private company into public company. (i)- A private company shall be sealed (ii)- Number of members shall be increase (iii)- Number of directors shall be increase (iv)- Prospective shall be issue  (v)- Qualified editors shall be appointed (vi)- Statutory meeting shall be hold (vii)- Basic documents shall be altered. Following are the ideas of conversion of private into public.

              (i)- Together the capital (ii)- To get the benefits which a public company is entitled (iii)- To enhance the business a broder level (iv)- To issue prospectus (v)- To get more borrowing powers (vi)- To transfer its share without any restrictions (vii)- To invite public (viii)- To issue debentures into public (ix)- To circulate into public As a general rule public company cannot be converted into private company. It can be converted with the prior approval of SECP 1997  

 3- Procedure for conversion of public into private:

                        A notice for a conversion of company

                      a- Date of meeting

                      b- Purpose of meeting

                      c- Place of meeting

                      d- Copy of resolution

  A general meeting shall be held and members discuss conversion of company. A special resolution is to passed by the members by ¾ majority. An application shall be file to SECP which include reason for conversion. SECP shall confirm the conversion and shall give an order for conversion of public into private. (i)- Restriction on transfer of share (ii)-  Reduction in member  (iii)- Cannot invite public (iv)-  Cannot issue prospectus (v)-  Business at narrow level

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Conflict Of Interest| Law

     Conflict of interest means incompatibility between once interest and his public duties. Once person shall be deemed to have an interest in a matter, this interest must give rise to conflict between his duties to perform his function.

Sec 16, 17 SECP Act 1997  A real incompatibility between once private interest and his public duty. Means the act or process of making interest that was previously unknown . Following are the two condition for disclosure of interest a.     Disclosure before discussion of matter b.    Disclosure must be in writing.

A disclosure of interest shall be recorded in minutes of commission.

Following are the effects of disclosure of effect

a.     No participation in decision

b.    Disregarded from constituting quorum.

He shall be declare guilty of an offence

i.                   Imprisonment upto one year.

ii.                 Fine upto one millon

iii.              Or both

a.     Non awareness of fact b.    Due care was exercised Commissioner to disclosure to writing to federal government

     Chairman shall serve a notice to federal government on disclosure by commissioner. He shall disclosure his interest to the person concern in the matter including any person whose application is pending.  The chairman or the commissioner who has any interest in the matters and he has disc louse his interest shall not take part deterring matter. He can take part with consent of all concerned person.

     

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Formation Of Company | Education

                      Formation of company is an act of registration a corporate body for the purpose to build an artificial person. A company can be formed through its, permition, incorporation, subscription and at last commencement of business  i- Company ordinance 1984 ii- SECP 1997 “Union or association of person for carrying on a commercial or industrial enterprise.  Every company after it has been formed shall be registered. Procedure of formation of company can be discussed under five stages towards the formation of company. 

                    i- Permotion stage  ii- Incorporation stage   iii- Subscription stage iv- Commencement stage  v- Conformation by SECP At permotion stage following tasks are performed.  i- The type of company shall   be choiced  ii- Meeting of mind must take effect iii- Idea shall be conceive  iv- Eligibility of experts shall be taken into consideratio  v- Preliminary contracts shall be improved vi- The contracts shall be registered if necessary

                             For incorporation of a company some documents shall be prepared discussed as followedMemorandum is the association of the company. It is the document which is to be prepared for filing as application for incorporation.Articles include all internal conditions or rules of the company. It is the second important document for the formation of company. A declaration by the promoter that they are going to form a company must also be made for incorporation purposes. A receipt of challan shall also be attached with the application of registration of company. At subscription stage company has to comply with following requirements.

                     A prospectus shall be prepared for the purposes to invite the public. Lists of the persons have consented to act as directors of the company shall be prepared. Every company shall deposit registration fee on share capitals in the government treasury. A certificate of incorporation shall be issued to a company which has complied with all the requirement of registration. Private company need not to get certificate of commencement of business. A public company after getting incorporation certificate shall also be required to receive a further certificate called trading certificate.  “It shall be conclusive evidence that company is entitled to commence business”

                                  A company of want to enlist itself a listed company in stock exchange than all the requirements of a listed company must be the fulfilled. Last step is to get conformation from SECP for the formation of company. Company shall be called an artificial person and a separate legal entity. A company can be formed through its, permition, incorporation, subscription and at last commencement of business. Company shall be called an artificial person and a separate legal entity.

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Indoor Management| Legal Education

              Doctrine of indoor management is opposed to the doctrine of constructive notice. It is a check on the management of the company. The persons who come in the sight to deal with the company may presume that the internal affairs of the company are running smoothly.  It means that a person instead of having knowledge may presume the internal affairs of the company are running properly.

It means that the person who deals with the company is deemed to have notice of the powers of company and its directors. Doctrine of indoor management and constructive notice always apply parallel in a same case. To answer the doctrine of constructive notice doctrine of constructive notice doctrine of indoor management was introduced.  Constructive notice it based on the caveat emptor.

                        nemo dal quod not nabet

               “No one can transfer be has title than he himself has”

                 Royal British Bank v/s Turquand

                  1856 119 ER 886

        These are the following brief facts of the case  (a)- The cool mining and Railway Company got loan from royal British Bank. (b)- The amount of loan was 20, 00 pounds. (c)- The debt was obtained by directors on behalf of the company.  “They were bound to read the statute articles of association but they are not bound to do or more”. Duty imposed by the constructive notice on the royal Bank.

 Constructive notice principles imposed a duty on the Bank that the bank is deemed to have notice to have their contents including the powers of company and directors.    Duty imposed by the indoor management on the directors. Doctrine of indoor management imposes a duty on the directors that they are working according to the articles and company is running smoothly. The rule has great practicability it has been use to cover acts done on behalf of company by persons who have never been appointed as directors.

             There are some exceptions to the rule of indoor management. When the person entering into the contract with company has the knowledge of irregularities, the principle of indoor management shall not apply. Where the person entering into contract has the suspension of irregularity before entering into contract.Where the plaintiff has the knowledge when there the doctrine shall not apply.

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Debenture| Legal Education

                     The public company issues share and debenture for raising capital. A share holder becomes the member of company while debenture holder is not a member of company debenture is a contract of debenture.  Debenture includes debentures stock, bounds, finance, certificate and any other securities other than a share of company weather constituting a charge of the assets of company or not. “Any instrument under the seal of company evidencing a debenture” Debenture can be classified into different kinds under different heads.  (i)- Kind regarding transferability  (ii)- Kind regarding security (iii)- Kind regarding redeamability (iv)- Kinds regarding conversion

                    Registered debenture is those which can be transferable by fulfilling the condition of registration. Bearer debenture is such which can be transfer without any condition. Regarding security debenture can be classified into following two kinds.  Secured debenture is those where some security has been contained for debenture. Un-secure debenture is those where company has not been created any security.Following are two kinds of debenture with reference to redeamability of debentures. Where the company says that company shall take back debentures at any time. Such debentures are called redeemable debentures. A debenture which shall remain forever with a person is called perpetual debenture. 

 Following are two kinds regarding conversion Those defenses which can be converted into shares are called convertible debenture.  Those which can’t be converted into shares are called non-convertible debenture. It is the power of a company to issue debentures by following the procedure provided by company ordinance. Following is the procedure of issuance of debenture. For issuance of debenture first a meeting shall be hold a   board of directors shall be held.  A general meeting shall be held and notice for that general meeting shall be given to all the members of company. A resolution shall be passed with simple majority for issuance debenture. After the resolution is passed debenture shall be issued finally.     

                

            (i)- Name of company (ii)- Serial number (iii)- Name of debenture holder (iv)- Principle amount payable (v)- Tare of interest (vi)- Date of issuance Following are the remedies available to debenture holder  It is a remedy who is agreed to file a civil suit. Debenture holders can sale assets for the recovery of money. The court can appoint a reserve to recover for a debenture holder who is aggrieved. A debenture holder can file a petition for winding up of company as remedy available to him. Debenture holder can file even a suite file recovery of arrears. Debenture money is not paid.

  

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Asylum| Law

Asylum is quite opposite of extradition. A states liability to grant asylum is of ancient origins. Every state has preliminary right to grant asylum unless it has accepted some particular restriction in this regard for example a treaty of extradition would be reasonable check on the right of asylum to the extent of the treaty. The word asylum is Latin word and derived from a Greek word asylim which means unavoidable person.

 A sanctuary or place of refuge and protection where criminals and debtors find shelter and from which they cannot be taken without sacrilege.   “Asylum is the protection which a state grants on its territory or in some of her place under the control of certain of its organs to a person who comes to seek it.” Article 14 of universal declaration of human rights: Every one has a right to seek and enjoy in other countries asylum from prosecution.

The conception of asylum in the international law involves two elements.  Shelter which is more than merely temporary refuge   Degree of active protection (by theauthorities in the control of the territory of asylum.

It was held by ICJ that asylum may be granted on humanitarian grounds in order to protect political offenders against the violent actions. Territorial asylum is the right of the state whether to grant the territorial asylum or not . the state concerned can also reject the territorial asylum when there is a large number of the person seeking the asylum The territorial asylum is not granted to the terrorist

. This kind of asylum is granted to criminals who expect the prosecution it is also granted to the political criminals. Asylum granted by a state in the exercise of its sovereignty to persons entitled to persons entitled to invoke art 14 of the universal declaration of the human rights shall be respected by all other states. Every state has the right in the exercise of its sovereignty to admit into its territory such persons as it deems advisable without through the exercise of the right giving rise to complaints by any other state.

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